Nigeria, World Bank Angling To Reach a Deal On Electricity Overhaul Plan
Nigeria and the World Bank is angling to reach a deal on electricity overhaul plan as steps set to close out a bailout plan to improve the country’s ailing electricity production and distribution capacity is initiated.
Both the Federal Government of Nigeria and the World Bank Group consecutively had a high level consultation meeting to discuss World Bank Group support for the government’s power sector recovery programme at the last Spring Meeting of the World Bank and International Monetary Fund (IMF) held in Washington, United States.
The programme got support from the Federal Executive Council (FEC) on March 22, 2017.
From World Bank cursory look at Nigeria’s power sector problems, it has issued a statement stating that the current status of the country’s power sector is characterized by poor service and lack of liquidity, adding that it was a source of macro-economic imbalances and constraint to the economic revival of growth for Nigeria.
It affirmed that a deal on the preceding issues is imminent and that both parties were committed to seeing it out soon.
The statement quoted the Minister of Power, Works and Housing, Mr. Babatunde Fashola, to have said that: “The approval of the power sector recovery programme by the Federal Executive Council demonstrates that the Federal Government is committed to the sustainable development of the power sector. The implementation of the program is critical to achieving the objectives of the government’s Economic Growth and Recovery Plan.”
Similarly, the Minister of Finance, Mrs. Kemi Adeosun, reportedly said at the meeting that: “There is need for well-designed unmasking in order to attract private investors to the sector. All the agencies of government will work in concert to ensure implementation of the power sector recovery program.”
According to the statement, the plan also got a legislative backing with the Senate Committee Chairman on Power, Steel and Metallurgy, Senator Enyinnaya Abaribe allegedly saying that: “The legislative arm of the Nigerian government is fully committed to the successful implementation of the power sector recovery program.”
Also hampering on further legislative backing on the same plan was the Chairman, House of Representatives Committee on Power, Hon. Dan Asuquo, who said: “We will make sure our oversight functions focus on the completion of projects and initiatives that support the effectiveness of the power sector recovery program.”
On the art of the World Bank Group, the statement noted that it congratulated Nigeria on its commitment to the program, and stressed the critical importance of the power sector to Nigeria’s development and restoring macroeconomic resilience and growth.
The meeting held by the duo, it explained, discussed the action plan set out in the program, as well as indicated the need for strong inter-agency relationship to ensure that it attains its aims.
“Controlling the cost of electricity supply is a critical element of the recovery program that will require close attention to prioritizing investments based on least cost power development investment planning principles,” said the World Bank Senior Director for Energy and Extraction Industries, Riccardo Puliti, in the statement.
Similarly, the statement quoted the Global Director for Infrastructure and Natural Resources at the International Finance Corporation (IFC), Bernard Sheahan, to have said at the meeting that: “A turnaround of the power sector will require the expertise and financing of the private sector.”
Sheahan added that: “This would require continuous improvement in the investment climate in Nigeria and strong communications among stakeholders on the sector reform plan at its implementation.”
Also speaking at the meeting, the Director of Operations at the Multilateral Investment Guarantee Agency (MIGA), Sarvesh Suri, explained that: “A full range of instruments will be employed to help the government mobilize investments directly from the private sector and through private sector guarantees.”
Accordingly, the World Bank Group also reaffirmed its strong partnership with Nigeria in resolving the challenges in the power sector.
It stated it would bring its experience in developing financing solutions and attracting private sector capital in Nigeria, adding that the meeting resulted in agreement on the next steps to be taken in developing the World Bank Group’s support.